Verizon chief wants control of joint venture

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Ivan Seidenberg, Verizon Communications chairman and chief executive, said on Thursday that the US telecommunications group stood ready to increase its stake in Verizon Wireless or acquire all of the US mobile carrier from Britain’s Vodafone, its joint venture partner.

Mr Seidenberg acknowledged during a conference call with analysts that Vodafone, under pressure from some of its UK institutional shareholders, appeared to have become more open to selling its Verizon Wireless stake.

He said the US carrier, which has long cherished the desire to increase its Verizon wireless stake, had had no direct indication from Vodafone that the UK-based company had changed its position, but added: “To the extent, however, that there is a change of view coming from Vodafone, we clearly would be interested in increasing ownership of Verizon Wireless, whether in stages or actually acquiring 100 per cent of it.”

Mr Seidenberg noted that Verizon Wireless – which helped underpin Verizon’s fourth-quarter and full-year results with record subscriber gains – has “created a lot of value for both sides. I think that it is a good time to think about this”.

The Verizon chief said he and Doreen Tobin, Verizon’s chief financial officer, had talked about the options for financing such a move and would try to provide Vodafone “with as much cash as possible”, should a deal materialise.

He said the sale of Verizon’s stake in Italy’s Vodafone Omnitel might form part of such a deal but added: “I think we need to give Vodafone some room to think through what they want to do. But our position has been what it’s always been. If the opportunity came to be we would be . . . we would stand ready to work with them.”

Mr Seidenberg’s comments came after Verizon and AT&T, the second-largest US telecommunications group, both their fourth-quarter and full-year results and highlighted strong performances by their mobile telephony joint ventures and gains in DSL broad-band subscribers that helped them to offset continuing local phone line losses. Verizon’s fourth-quarter revenues grew 5.8 per cent to $19.3bn, boosted largely by the performance of Verizon Wireless that increased its fourth-quarter revenues by 18.3 per cent to $8.7bn. Verizon Wireless gained a record 2m subscribers to end the year with 51.3m customers, narrowing the gap with Cingular Wireless.

Verizon’s earnings fell to $1.7bn, or 59 cents per share, compared with $3bn, or $1.08, a year earlier, when Verizon posted a big gain on asset sales.

Excluding the year-ago asset sales, fourth-quarter earnings in 2004 were $1.8bn, or 64 cents

Revenues at AT&T – the renamed SBC Communications group that recently completed its acquisition of AT&T – jumped 25 per cent to $21.6bn, boosted by the contribution of Cingular, in which the group has a 60 per cent stake.
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